Finding the right loan means balancing your mortgage loan options with your housing requirements and financial goals, now and in the future. Keep in mind, the right mortgage is not just having the lowest interest rate but much more. And this “much more” will be determined by your personal situation.



Your personal situation and your limits to pay for monthly mortgage payments can be evaluated by at the very least answering the following questions:

- What is your current financial situation? (including income, savings, cash and debt ratio)

- How long do you intend to keep your home?

- How comfortable you are with a changing mortgage payment amount?

- How do you expect your finances to change in the coming years?

- Have you planned to payoff the mortgage loan before retiring?

The answers to these few questions will give you the idea of your financial position.

Now the next step is to decide two key options:

- mortgage loan term,

- type of interest rate and payment (fixed interest rate, adjustable interest rate or interest only)

The length of mortgage loan can be 5 years; it can be 15 or 20 years, or even 30 years. While selecting a fixed or adjustable interest rate you should be aware that the adjustable interest rate mortgage is more risky because the interest rate will change. A fixed-rate loan offers more stability because of the locked-in rate.

You will be able to pay off a shorter-term loan more quickly, but your monthly payments will be significantly higher. Long-term fixed-rate loans are usually popular because they offer stability, and many people find that they are easier to fit into their budget. In the long run they will cost you more, but you will have more available capital when you need it, and you will be less likely to default on the loan should an emergency arise.

It is clear that the key to selecting the right mortgage loan for your needs should fit comfortably into your financial goals and that is having payments within your budget and at a comfortable level of risk.

By all means, do your homework when it comes to your mortgage loan. The information you gather will be vital to your future finances and comfort.